[sbinews] Technology Management

From: sbistcbangalore@xxxxxxxx

To: sbinews@xxxxxxxxxxxxx

Date: Sat, 13 Dec 2003 07:57:51 +0500

Technology is key, but efficacy depends on use
TIMES NEWS NETWORK[ THURSDAY, DECEMBER 11, 2003 11:58:09 PM ]
MUMBAI: Technology could well turn out to be a cost monster for banks if the
players do not use it to make a difference. But at the same time bankers feel
that technology needs to evolve radically to be a key differentiator in the
coming years.
Participating in a session on “Technology: Lifeline or Cost Monster?” at the
Bank Economists’ Conference on Thursday, Deutsche Bank’s CEO Gunit Chadha said
that banks were relying on technology to build business and have an edge over
competitiors.
“My best way of approaching technology is that by say ‘10 or ‘15, technology
would not be a differentiator. It is a differentiator now. However, what you do
with the technology now, will make the difference in the future,” said Mr
Chadha. He felt that banks not thinking on these lines may well see technology
becoming a “cost monster” in the years to come.
Making an indirect reference to the growing commoditisation of technology, Raj
Dosaj, senior director of Sun Microsystems said that banks were readily
embracing tech solutions, but paying little heed to whether the same technology
could be seamless across users. “We have completely customised technology to
such an extent that the bank is an end user, the technology belongs to it.
Customers are not asking this industry (tech companies) to change,” said Mr
Dosaj.
Recounting his IDBI Bank days, Mr Chadha said termed his relationship with his
bank’s chief technology officer as “distrustful.” He said that each time there
was a proposal from the technology officer, he would refuse it. “He would talk
about things such as higher server capacity,” said Mr Chadha. The CTO ended
more time convincing him about his ideas. Mr Chadha said that the bank was able
to build a sound technology platform, which served its purpose of building
business for the bank. The key issue was that in the coming years, everybody
would have the technology, so what would differentiate you.
On outsourcing, Mr Chadha felt that Indian banks should follow their foreign
counterparts in setting up BPOs. “Citigroup has e-Serve, StanChart has Scope
and HSBC and Deutsche also have their BPOs. Indian banks should consider this,”
he said.
Mr Chadha pointed out that the upsides in terms of cost savings from
outsourcing were limited and banks needed to continuously evaluate the
effectivness of outsourcing.
SBI’s deputy managing director Ashok Kini said that his bank was in the process
of conceptualising on what business areas the bank’s proposed IT company should
focus on. “The plan would be finalised by March ‘04,” he said.
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